Analysts baffled as Apple sees biggest share fall since 2008

APPLE saw $35 billion wiped off its stock market valuation yesterday after China Mobile announced it was planning to offer its customers a smartphone made by the US giant's Finnish rival Nokia ahead of the iPhone5.

Shares in the iPhone maker fell 6.4 per cent to $538.79 – the biggest one-day drop since December 2008, The Daily Telegraph reports. America's biggest company is now worth a paltry $506.8bn.

Investors took fright at China Mobile's decision to offer its customers Nokia Lumia 920T handsets. The trouble was, the biggest mobile network in the world's biggest mobile market is yet to set a date for when it will begin selling Apple's iPhone 5.

Investors were also worried about a report that predicted Apple's share of the tablet computer market is on the wane. IDC forecasting said that the iPad will fall from a 56.3 per cent share last year to 53.8 per cent this year, sliding below 50 per cent by 2016. Google's slice will increase from 39.8 per cent to 42.7 per cent.

"The assault on Apple's consumer-electronics home turf presents a stiff challenge for CEO Tim Cook," according to Reuters, which quotes Brian Battle, director of trading at Performance Trust Capital Partners, as saying Apple needs another "home run" for the share slide to be arrested.

"This is not going to be a short-term trend," said Battle. "This is a management test - of how well they can perform without Steve Jobs. They need another new product that hits it out of the park. Without that, they could get a gradual grind-down in confidence."

Some analysts appeared baffled by the share price drop, with more than one pointing out the iPhone 5 is available on other Chinese mobile networks and that China Mobile is likely to sign a deal with Apple next year anyway.

"It makes no sense. There are lines around the block for their products all around the world," said Daniel Ernst of Hudson Square Research. "No other company has that."

He added: "Apple stock is significantly more volatile than its earnings and innovation stream. And yet the wind blows slightly from the south instead of the east one particular morning, and the stock is down six per cent."